The Newsroom Dilemma

Abstract

Conventional wisdom suggests that competition in the modern digital environment pushes media outlets toward the early release of less accurate information. We show that this is not necessarily the case. Two opposing forces determine the resolution of the speed-accuracy tradeoff: preemption and reputation. While competition exacerbates preemption concerns, it gives the audience additional information by allowing them to compare publication times. Hence, more competitive environments may be more conducive to reputation building, which may lead to better reporting. However, we show that the audience may be worse off due to the outlets' better initial information.

Keywords: media competition, preemption, reputation

JEL Classification: D43, D83, L82